Bloomberg News

Cuomo’s $132.6 Billion Budget Approved by New York Lawmakers

March 30, 2012

Andrew Cuomo, governor of  New York. Photographer: Chip Somodevilla/Getty Images

Andrew Cuomo, governor of New York. Photographer: Chip Somodevilla/Getty Images

New York (STONY1:US) lawmakers approved Governor Andrew Cuomo’s $132.6 billion budget, marking the earliest passage of a spending plan in Albany since 1983.

The Senate and Assembly today ratified the plan, which cuts spending by $135 million and includes no new taxes. It follows separate deals that Cuomo, a 54-year-old Democrat, struck with lawmakers this month on a pension overhaul, teacher evaluations, casino gambling, a criminal DNA database and redistricting.

The budget sets up a task force to coordinate infrastructure development across agencies and a $15 billion fund for projects that Cuomo says will create tens of thousands of jobs. It also provides $13.1 billion for the Metropolitan Transportation Authority’s five-year capital budget.

It’s Cuomo’s second spending plan since taking office last year, and both times he and lawmakers reached a deal before the April 1 deadline. From 1985 to 2004, the budget was late 19 out of 20 years, said Morris Peters, a Budget Division spokesman. In 2010, lawmakers didn’t approve the final piece of the budget until August.

“At one time the state government was a joke,” Cuomo said today at a press conference in Albany. “They were literally laughing at it on the late-night shows. It has been a dramatic and almost unbelievable turnaround in 15 months. We went from a model of dysfunction to, I believe, a model of function.”

New Power

Cuomo was aided by declining revenue and his power to force lawmakers to choose between shutting the government or passing the budget through an appropriations bill called an extender, said Steve Greenberg, a pollster for Siena College in Loudonville, New York.

“There tends to be more fighting when there’s more money to spend,” Greenberg said. “I also don’t think the Legislature wants to go down the road and test out how Cuomo would impose his budget through an extender if the budget is late.”

Governor David Paterson, Cuomo’s predecessor, was the first to use the extenders to force lawmakers to approve pieces of his budget. The process is used to keep the government running in a new fiscal year when there’s no agreement. The governor has the power, established by a 2004 court ruling, to put almost any item in an extender bill. Cuomo had threatened to use the procedure if talks had gone past April 1.

The budget closes what was once a $3.5 billion deficit, a process made easier when lawmakers in December approved a Cuomo- backed tax increase on joint earners making at least $2 million annually. That lowered the gap to $2 billion. The remaining savings were reached mostly by consolidating agencies.

Decrepit Bridges

The infrastructure fund, called NY Works, and the task force that oversees it are at the center of the governor’s plans to jump-start the economy, Cuomo said March 27, when he and legislative leaders reached a budget deal.

About 32 percent of New York’s bridges are considered deficient, meaning that although they’re safe, they need rehabilitation to be fully functional, Howard Glaser, director of state operations, has said. The fund will be used to speed up work on 115 bridges and 2,000 miles (3,218 kilometers) of roads, using $1.2 billion in state funding, $1 billion from the federal government, $9.3 billion from the state’s authorities and $3.5 billion from private industry, he said.

“NY Works has a different premise for government,” Cuomo said March 28 on WCNY radio. “It says that government can actually be a stimulative, participatory partner with the private sector in creating jobs.”

MTA Funding

The MTA funding, which includes raising the largest U.S. transit agency’s borrowing cap to about $41 billion from $34 billion and $770 million in direct state financing, will also create jobs, he said.

The MTA approved March 28 a $599 million deal with Bombardier Inc. (BBD/B), the Canadian maker of aircraft and railroad equipment, that Cuomo said will preserve 500 jobs at the company’s facility in Plattsburgh, a city in northern New York.

“The decision by the MTA to award this contract to Bombardier is a major win for the people of the North Country and the entire region’s economy,” Cuomo said in an e-mailed statement.

Cuomo’s deal with lawmakers on changes to the pension system applies only to new workers. He says it will save the state and its local governments $80 billion over 30 years by raising the retirement age to 63 from 62 and offering a 401(k)- type plan for nonunion workers earning at least $75,000 annually.

The pension deal, originally a measure in the budget Cuomo proposed in January, was part of a package that also included a constitutional amendment to create as many as seven Las Vegas- style casinos in the third-most-populous U.S. state.

The fiscal 2013 budget creates a seven-member commission to oversee Indian casinos, horse racing, and run the lottery along with video terminals at race tracks. The commission, with five members named by the governor and one each picked by the Senate majority leader and the Assembly speaker, will replace the current Racing and Wagering Board and the Lottery Division.

To contact the reporter on this story: Freeman Klopott in Albany, New York, at fklopott@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum in New York at mtannen@bloomberg.net


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